Goldman Sachs downgraded equities to "neutral" over the next three months on Friday afternoon, citing the risk of a temporary sell-off in stocks following a sell-off in bonds.

The firm said the near-term risk/reward profile for stocks was less attractive, even as it reiterated a "strong conviction" that stocks were the best-positioned class over the next year.

"We are concerned that a sell-off in government bonds will lead to a temporary sell-off in equities in line with what we saw last summer, though the magnitude is likely to be smaller as the need for bond yields to correct is lower than it was back then," Goldman said.

The firm also downgraded corporate bonds to "underweight" over 3 and 12 months.